iShares helps BlackRock deliver record results

Jan 17th, 2013 | By | Category: ETF and Index News

BlackRock, owner of the iShares family of exchange-traded funds (ETFs), has reported record earnings on the back of surging inflows and soaring assets under management. The company’s iShares division was the stand-out performer.

iShares helps BlackRock deliver record results

BlackRock’s iShares family of exchange-traded funds has helped the asset manager to deliver record quarterly and yearly results.

Globally, BlackRock attracted $47.0 billion in net inflows in the fourth quarter (Q4) of 2012, of which over 75 per cent, or $35.7 billion, was contributed by iShares.

Over the full year, the asset manager added $107.7 billion in net inflows with almost 80 percent, or $85.3 billion, coming from iShares.

These flows helped the company to deliver operating earnings of $1.0 billion and $3.5 billion for Q4 and the full year, respectively.

“BlackRock’s financial performance in 2012 was strong by any measure. We closed the year with record earnings for both the quarter and the year,” said Laurence D. Fink, Chairman and CEO of BlackRock.

“iShares is a very profitable business and is one of their key growth drivers,” Robert Lee, an analyst at Keefe, Bruyette & Woods in New York, said in a telephone interview with Bloomberg. “It’s a big chunk of their revenue, but its contribution to profitability is probably even higher.”

Of the Q4 inflows generated by iShares, $30.1 billion went into equity ETFs, $4.5 billion went into fixed income ETFs and $1.1 billion went into alternative ETFs, such as those tracking commodities. Within equities, demand tilted toward broad market and large-cap equities, and emerging markets over developed markets.

Commenting on iShares, Fink said: “As clients sought efficient tools and creative solutions to manage their investment exposure, they turned to iShares. As a result, iShares maintained its number one global market share position and net new business returned to pre-crisis levels with more than $85 billion in new assets generated this year.”

On the question of acquisitions, he added: “We are well-positioned to continue delivering for our shareholders while investing for future growth…. Our strong and stable capital position enables BlackRock to take advantage of opportunities to make strategic acquisitions like Claymore [a Canadian ETF business], Swiss Re and, most recently, our purchase of the ETF business from Credit Suisse, which represents a major expansion for us in the Swiss market.”

As of year end 2012, assets under management for the whole company stood at $3.792 trillion with iShares comprising $758.6 billion, equivalent to 20.0 per cent.

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